tl;dr
Crypto exchange Gemini has filed a complaint against the Commodity Futures Trading Commission (CFTC), accusing its enforcement division of a seven-year vindictive campaign aimed at career advancement rather than consumer protection. Gemini alleges the investigation originated from a false whistleblo...
Crypto exchange Gemini has accused the Commodity Futures Trading Commission (CFTC) enforcement division of conducting a vindictive seven-year campaign focused on personal career advancement rather than consumer protection. The allegations, detailed in a complaint filed to the CFTC Inspector General, claim the investigation stemmed from flawed whistleblower claims by a former employee fired for fraud.
Gemini's grievances originate from a 2022 CFTC lawsuit alleging the exchange made misleading statements regarding its Bitcoin auction pricing in 2017. These pricing mechanisms were pivotal for Cboe's Bitcoin futures contract, which relied on Gemini’s auction prices for settlement values. The lawsuit resulted in a $5 million settlement by Gemini without an admission of wrongdoing.
The whistleblower in question, former COO Benjamin Small, was found by a 2022 arbitrator to have engaged in fraud and made false statements in his submission. Despite this, the CFTC enforcement division persisted with the case and reportedly may reward Small with $1.5 million. Gemini also points to the departure of lead prosecutor Andrew Rodgers, who left the CFTC soon after and now highlights the Gemini case in his private practice.
Gemini's complaint criticizes the enforcement division’s selective and unfair use of federal law, describing the actions as "lawfare" and accusing agency lawyers of prioritizing high-profile wins over market integrity. The exchange welcomes recent calls for reform within the CFTC but stresses that addressing the enforcement division’s issues requires serious, sustained commitment.
Amid this legal turmoil, Gemini is pushing forward with expansion plans, including pursuing a public offering and seeking a Malta license to operate in the European Union under new regulatory frameworks. The company aims to continue its growth trajectory despite ongoing regulatory challenges.